Tanzania Economy Receives EU and UK Support

The Tanzania economy has been approved for an aid package from the European Commission in the amount of 385 million Euros, which represents the largest sum ever given to the country in this annual assistance package, as well as an additional Tsh 230 billion from the UK, through its Department for International Development (DFID).

According to a statement that was released by the EU Humanitarian Aid Commissioner, Karel De Gucht, and reported by the Guardian, the fact that the sum of the assistance package was substantial should indicate the Commission’s confidence in the country’s government.

“This substantial financial commitment demonstrates our confidence in the Tanzanian government to aggressively tackle the economic challenges ahead,” he said.

The European Commission went on to specify that it was planning to inject 305 million Euros into the country’s national budget in support of the Millennium Development Goal program and to then set aside 70 million Euros to be used for road construction.

An additional 8 million Euros has been allocated for renewable energy projects in the country, as currently 10 per cent of the country’s population has access to electricity.

At the same time as the country is preparing to receive funding from the EU, it is also ready to welcome funds from the government of the UK in support of the country’s budget for the 2009/2010 financial year.

According to the Guardian report, the Minister of Finance and Economic Affairs, Mustafa Mkulo, has indicated that the money from this fund will be directed to the implementation of the National Strategy for Growth and Reduction of Poverty.

“The money has come at the right time,” said Mr. Mkulo, “consistent with the Joint Assistance Strategy for Tanzanian (JAST) principles and the memorandum of understanding that guides the implementation of General Budget Support (GBS).”

Mr. Mkulo went on to thank the UK for its continued support of the Tanzanian government through the timely disbursement of available GBS resources.

Currently, the GBS group is composed of members from comprises Norway, Denmark, the African Development Bank, Canada, the European Union, Finland, Ireland, Japan, Germany, the Netherlands, Sweden, United Kingdom and the World Bank.

According to the Head of DFID, Darren Welch, the UK is committed to the development efforts of Tanzania and is therefore planning to continue to be the largest bilateral donor providing budget support to Tanzania.

“We want to see more people getting access to safe water, more mothers giving birth safely and more children going to school,” he said, “We are therefore keen to support the Tanzanian government to make faster progress in reducing poverty and bringing a better life to its entire people.”

Mr. Welch went on to explain that he purpose of the DFID support was to help the Tanzanian government remain committed to working hard to improve the country’s business environment, to develop decent jobs and to take decisive action to challenge and tackle corruption.

Currently, Tanzania relies on approximately Tsh3 trillion in foreign aid money in order to meet its Tsh9.5 trillion national budget.